Boeing Scraps $4.2 Billion Embraer Deal as Market Shrinks (1)

By Julie Johnsson

April 25, 2020, 4:31 PM

Collapse of talks could benefit Airbus in single-aisle planes

Statement comes after new Boeing CEO warned of ‘new reality’

Boeing Co. is walking away from its proposed $4.2 billion combination with Embraer SA’s commercial-aircraft business, ending years of talks, as the planemakers brace for a far smaller jetliner market after the coronavirus pandemic.

The deal’s collapse turns two long-time business partners into competitors and strengthens Airbus SE’s long-term advantage in the lucrative market for single-aisle planes. The partnership with Brazil’s Embraer would have armed the U.S. aerospace giant with smaller jets to compete against a new offering from Airbus.

Boeing is abandoning the proposed tie-up weeks after Chief Executive Officer Dave Calhoun warned employees that the company would...